As Canada heads toward legalization of marijuana, Alberta producer Aurora Cannabis is focused on expansion with ambitions to raise a $160-million “war chest” from investors who are anxious to profit from what is expected to be a multibillion industry.

According to one analyst, Aurora has been raising more money recently than any other cannabis company in Canada, and perhaps beyond, to prepare for legalization, now expected by mid-2018.

The company’s success to date amassing capital is more evidence that investors are flocking to the nascent industry.

But there were signs Thursday that investors’ already wild ride will only continue to be turbulent as major Canadian cannabis stocks fell as much as nearly 10 per cent after Ottawa tabled legislation to legalize pot.

“We made a bet that this is the direction that Canada is heading in, so we invested not only in the medical side of things but we prepared for an expansion into the consumer market,” he said. “So it’s a very good day for us.”

Ottawa’s legislation provided some clarity on what the recreational market will look like, such as impaired driving rules, but major questions remain, including how cannabis will be distributed, which will be determined by the provinces.

Alberta Premier Rachel Notley said her government faces a challenging task to have a cannabis distribution network rolled out by a July 2018 deadline.

“It may be simple to say, ‘yeah, let’s legalize marijuana,’” Notley told reporters. “Administering it is actually very complex.”

The federal government said Canadians will be able to buy cannabis by mail through a federally licensed producer if they live in a province that doesn’t have a regulated retail system by mid-2018.

After reviewing Ottawa’s legislation, the Alberta government will consult the public on the design of the cannabis market, including retail sales and the minimum age of consumers, which the federal government set at 18, though the provinces can increase it.

The Alberta Liquor Store Association, which represents 570 liquor stores, said it plans to lobby the provincial government to have alcohol retailers distribute legal cannabis.

The association noted in a release that a top federal goal is to keep cannabis out of children’s hands, which the group said its members have been doing with alcohol and would do with marijuana.

A federal task force had recommended that cannabis not be sold in liquor stores, given concerns that having the drug available in so many locations would encourage more widespread use.

Alberta Justice Minister Kathleen Ganley said the government would consult Albertans on the subject, but her initial reaction is that the task force made the recommendation “probably for valid reasons.”

Aurora, Alberta’s only licensed producer of marijuana, has a production facility in Cremona north of Calgary with another, larger greenhouse under construction near the Edmonton airport. The location, Battley said, is ideal to meet the company’s strategy of providing same-day and next-day delivery to customers across the country.

Aurora is also buying a bankrupt company behind a mostly built production facility in a Montreal suburb for $7 million in shares and cash.

And company has been busy raising money.

“We now have a war chest in excess of $160 million in cash with which to pursue expansion inside Canada as well as expansion outside of Canada,” Battley said, noting Aurora plans to buy a 20 per cent stake in an Australian licensed grower.

Battley acknowledged there are several unknowns facing the domestic cannabis market, but he said he was focused on the “big picture,” that Canada is becoming the first G7 country to legalize cannabis.

Over time, he believes Ottawa will loosen some of the rules that have caused some concern for producers, including restrictions on advertising and packaging.

Aurora’s share price fell 21 cents, or nearly seven per cent, to close Thursday at $2.83 amid an industry-wide sell off of Canadian cannabis stocks. Noting investors often buy on rumours and sell on news, Battley called the sell off “normal volatility.”

Bruce Campbell, founder and portfolio manager at Kelowna-based StoneCastle Investment Management Inc., said investors may have sold in part because of the lengthy window leading up to legalization, though the timeline was anticipated.

Campbell said there will likely be more volatility as the country moves toward legalization and implements it.

The investment manager has previously drawn parallels between cannabis stocks and the tech bubble, given that investors have flocked to the sector amid rosy projections and wild speculation. The volatility has also led to major dips in share prices.

“There have been I would say three times where (share prices) have had major setbacks that to most investors would be so gut-wrenching that they would never go back to the sector,” Campbell said.

“People who invest in this sector hopefully know what they’re getting into, and I think that there will probably be more twists and turns yet.”

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